Page 347: #4

biz_venture_expected_value <- (2/5)*55000 + (3/5)*(-1750)
biz_venture_expected_value
## [1] 20950

Page 347: #6

COLA

Page 355: #3

p355 num 6

Page 364: #3

Answer: test and then drill regardless of test results…

p364 num 3

Page 373: #1

  1. Row b has highest expected value:
col_probabilities <- c(0.35, 0.3, 0.25, 0.1)
row_A_pay <- c(1100, 900, 400, 300)
row_B_pay <- c(850, 1500, 1000, 500)
row_C_pay <- c(700, 1200, 500, 900)

sum(col_probabilities %*% row_A_pay)
## [1] 785
sum(col_probabilities %*% row_B_pay)
## [1] 1047.5
sum(col_probabilities %*% row_C_pay)
## [1] 820
  1. Regret Table: Row B minimizes the expected regret:
df <- t(data.frame(row_A_pay, row_B_pay, row_C_pay))
df
##           [,1] [,2] [,3] [,4]
## row_A_pay 1100  900  400  300
## row_B_pay  850 1500 1000  500
## row_C_pay  700 1200  500  900
df[,1] <- max(df[,1]) - df[,1] 
df[,2] <- max(df[,2]) - df[,2] 
df[,3] <- max(df[,3]) - df[,3] 
df[,4] <- max(df[,4]) - df[,4]
df <- df * col_probabilities
df[,1] + df[,2] + df[,3] + df[,4]
## row_A_pay row_B_pay row_C_pay 
##       390       175       365